Citigroup to slash 200 IT contractor roles in tech overhaul

Citigroup plans to cut up to 200 information technology (IT) contractor jobs in China as it accelerates its global restructuring efforts and addresses ongoing regulatory concerns. This development, reported by Reuters and citing sources familiar with the matter, marks another step in the bank's broader strategy to streamline operations, strengthen risk controls, and shift towards a more permanent workforce model.

The planned job reductions will impact workers at Citigroup Services and Technology China, a wholly owned Shanghai subsidiary founded in 2002. This unit currently supports Citigroup’s operations across 20 countries and regions, including major markets such as the United States, the United Kingdom, and Hong Kong. According to insiders, around 100 employees were recently informed that their contracts would not be renewed, while another 100 are expected to receive layoff notices soon.

The decision aligns with Citigroup’s global hiring strategy, aimed at reducing its reliance on contractors while improving in-house expertise and oversight. Tim Ryan, Citigroup’s head of technology, previously stated that the company intends to decrease the proportion of contractors in its IT workforce from 50% to 20%.

This change also comes on the heels of a substantial regulatory penalty. In July 2024, U.S. regulators fined Citigroup $136 million for failing to adequately address longstanding data management shortcomings. The latest restructuring effort, including the China contractor layoffs, is viewed as a direct response to these issues, underlining the bank’s intention to strengthen risk management and data governance capabilities.

In a statement to Reuters, a Citigroup spokesperson clarified that the job cuts in China will not affect the firm’s core business strategy or its commitment to local and international clients. The spokesperson stressed that the changes are part of a wider push to build a more sustainable and effective operating model.

Citigroup’s move is part of a sweeping global reorganisation initiative that includes plans to cut 20,000 jobs worldwide by 2026. The broader objective is to simplify governance structures, reduce layers of management, and improve operational efficiency. The bank anticipates that these changes will deliver annualised run-rate savings of between $2 billion and $2.5 billion by 2026.

In parallel, Citigroup has been repositioning its global footprint by pulling back from less profitable or non-core markets. In December 2024, the bank completed the separation of its institutional banking business in Mexico and divested its consumer, small business, and mid-market units. Earlier in June 2024, it also sold its onshore consumer wealth portfolio in China to HSBC Holdings plc.

Other strategic exits include Citigroup’s withdrawal from UK retail banking and the ongoing wind-down of its operations in Korea and Russia. In Mexico, the bank is preparing for an initial public offering of its consumer and small to mid-sized business banking units, further reflecting its shift in strategic focus.

Amid these transformations, Citigroup's stock has remained resilient. The company’s shares have risen by 11.9% over the past six months, outperforming the industry average of 7.2%. Citigroup currently holds a Zacks Rank #3 (Hold), indicating a neutral recommendation from analysts.

Citigroup’s restructuring comes at a time when other major financial institutions are also announcing job cuts as part of cost-reduction strategies. Earlier this month, Reuters reported that HSBC Holdings plc intends to eliminate 348 roles in France — approximately 10% of its local workforce — through a voluntary redundancy scheme. The initiative is part of CEO Georges Elhedery’s broader plan to slash expenses by $1.5 billion by 2026.

Similarly, UBS Group AG has announced job cuts in France following its June 2023 acquisition of Credit Suisse. The move, revealed in a Bloomberg report, is aimed at integrating operations and responding to slower economic growth. UBS is working with employee representatives to implement support measures for affected staff.

As global banks recalibrate in response to regulatory, technological, and economic pressures, Citigroup’s decision to reduce its IT contractor headcount in China underscores a broader industry trend toward leaner, more accountable operations with an emphasis on core competencies and compliance.